Breaking News: Gachas To Be Banned in Second Life

 
A popular way of selling items in Second Life is coming to an end.

In the official blog today, Linden Lab announced that it will soon be banning sales through gacha machines in Second Life. The reason given was "Due to a changing regulatory climate."

Due to a changing regulatory climate, we’ve had to make the difficult decision to sunset a very popular sales mechanism for content in Second Life.  It’s widely known as "gacha", and is defined by a chance-based outcome as a result of a payment.  

We know that creators plan their content releases far in advance and will need to re-tool their products, so to mitigate the impact to those affected, we are giving a 30-day grace period, until midnight SLT on August 31.  After that time, selling content via gacha machines will no longer be permitted in Second Life.  Enforcement won’t start until September 1; after that date an Abuse Report for “Gaming Policy Violation” will be the preferred method of reporting this content to Linden Lab.  

We will continue to allow any sales where a payment is given for a known item, which means that items that had been purchased as “gacha” will be allowed to be re-sold as long as the buyer knows in advance the item and quantity they will receive. We will, of course, still allow fatpacks, and any other currently-allowed distribution mechanisms.

We did not make this decision lightly and we understand that it will impact creators as well as event organizers and certainly the shoppers! We look forward to fun creative ways of engagement that will come instead.  

Probably most familiar with shopping in Second Life knows about gachas. Based on Japanese gashapon games, they've become very popular in Second Life. The way it works is a machine gives one of a number of items listed at random, often with one or more listed as uncommon or rare. Events such as the Arcade and the Gacha Guild have sprung up selling items through only gacha machines. While highly popular, this method of shopping has also been criticized, notably by those calling it a form of gambling.

The ban does not apply to the reselling of gacha items, which has also gotten a following in Second Life, with groups for the selling and trading of them.

This move will no doubt have a big impact on Second Life, as well as be the target of much criticism (and praise from gacha's critics).

The Lab created a thread on the forums about the upcoming ban and invited discussion, and already people are responding, both opposing the ban, supporting it, and asking questions.

Stay tuned for further developments on this big move by the Lab.

Bixyl Shuftan
 

"EARN IT" Bill In Congress Could Mean Bad News For Internet Freedom

By Bixyl Shuftan

There's another Internet bill in Congress that could have potentially dire consequences for privacy expectations people online take for granted. Introduced "to establish a National Commission on Online Child Exploitation Prevention, and for other purposes," the "Eliminating Abusive and Rampant Neglect of  Interactive Technologies" Act, or EARN IT, "opens the door for the government to require new measures to screen users’ speech and even backdoors to read your private communications."

According to an article in Bloomberg, "The bipartisan measure, ... would affect a wide range of social media companies, cloud service providers, email and text platforms and other technology services. It could put Facebook in the government’s crosshairs for its plans to encrypt all of its messaging apps and undercut Apple’s refusal to create back doors into its devices and services." The article would go on to say, "The Justice Department has tentatively scheduled a Feb. 19 meeting on the future of the immunity known as Section 230 of the Communications Decency Act ... The provision protects platforms from responsibility for content posted by third parties. Although the measure doesn’t directly mention encryption, it would require that companies work with law enforcement to identify, remove, report and preserve evidence related to child exploitation -- which critics said would be impossible to do for services such as WhatsApp that are encrypted from end-to-end."

Companies would have to "certify that they are following the best practices set by the 15-member commission." If they don't to its satisfaction, "they would lose the legal immunity they currently enjoy under Section 230 relating to child exploitation and abuse laws. That would open the door to lawsuits for 'reckless' violations of those laws ..."

Supporters of the bill insist the ability to read encrypted messages is necessary, saying efforts to protect encryption, “will make it harder to detect -- and stop -- child abuse and similar crimes." Elliot Harmon of the Electronic Frontier Foundation retorted that if the bill became law, "the Attorney General could unilaterally dictate how online platforms and services must operate. If those companies don’t follow the Attorney General’s rules, they could be on the hook for millions of dollars in civil damages and even state criminal penalties. ... It opens the door for the government to require new measures to screen users’ speech and even backdoors to read your private communications.

"EARN IT undermines Section 230, the most important law protecting free speech online. Section 230 enforces the common-sense principle that if you say something illegal online, you should be the one held responsible, not the website or platform where you said it. Section 230 has played a crucial role in creating the modern Internet. Without it, social media as we know it today wouldn’t exist, and neither would the Internet Archive, Wikimedia, and many other essential educational and community resources. And it doesn’t just protect tech platforms either: if you’ve ever forwarded an email, thank Section 230 that you could do that without inviting legal risk on yourself." Harmon would call the bill an attack on Internet Security, entrepreneur innovation, and just plain unnecessary.

Facebook's CEO Mark Zuckerburg has stated his company will continue to be “standing up for encryption, against those who say that privacy mostly helps bad people.” Senator Ron Wyden has openly spoken in protest about the bill, "a tired, debunked plan to blow a hole in one of the most important security features protecting digital lives of the American people."

The website fightforthefuture.org/ has a petition calling on Congress to reject the bill. As of the writing of this article, it has over 8660 of the 12,800 signatures it set as a goal.

The Justice Department is currently led by Attorney General William Barr, whom lately has been the target of calls to resign for interfering with the trial of an ally of President Trump.

Sources: Electronic Frontier Foundation, Fight for the Future, Reuters, Bloomberg, Ron Wyden

Bixyl Shuftan

Net Neutrality Scheduled to End June 11

By Bixyl Shuftan

On December 14 2017, the Federal Communications Commission voted to end it's protection of Net Neutrality. The decision came despite numerous advocacy groups, over 200 businesses and trade groups, as well as skepticism of the public at large. Among the corporations calling for it's continuation is Linden Lab, whose founder Philip Rosedale predicted "especially negative" consequences as Internet providers could easily introduce bandwith caps and by-the-megabyte billing.

The new rules did not go in effect right away  They had to be posted to the Federal register first. For some reason, this had not been done for over four months, provoking guesses as to why. But on Thursday May 10, the FCC stated in a notice that thirty days after the following day, or June 11, the new rules doing away with the Net Neutrality protections would begin. "These unnecessary and harmful internet regulations will be repealed," FCC Chairman Ajit Pai stated.

So what happens next? There is a bill in Congress being pushed that if passed would require the FCC to keep the current protections. But while it needs only one more Senator to support it, it faces an uphill battle in the House. In the courts, more than twenty states have also filed suit to stop the FCC from repealing the present-day rules. Several states, including California and New York, are considering legislation enforcing Net Neutrality within their boundaries. But a spokesman for the FCC states such legislation would be illegal and would be challenged in court.

Gigi Sohn, an advisor to a former FCC chairman Tom Wheeler, commented that net neutrality's future will probably "stay murky" through the rest of the year.

Because of the importance of the issue of Net Neutrality, the Second Life Newser declared FCC Chairman Ajit Pai as it's "Man of the Year" for 2017 as we felt the potential harm of the disposal of these new regulations to Second Life outweighed the accomplishments of any one group of residents or any one accomplishment of Linden Lab.

Sources: CNN, Motherboard

Image Credit: Lanai Jarrico

Bixyl Shuftan

Linden Lab Issues Statement Supporting Net Neutrality

Net Neutrality has become an issue in recent weeks when the Chairman of the FCC, Ajit Pai, released a report calling for the repeal of laws protecting it. The result was numerous protests from individuals. But corporations and organizations have also joined the fight calling for Net Neutrality's continued protection. On Tuesday December 12, Linden Lab joined the number of businesses in it's support.

We at Linden Lab believe that net neutrality is extremely important. Lifting the FCC’s Open Internet Rules would not only jeopardize the experience of Residents using Second Life, but can also negatively impact all aspects of our online lives.

 

Later this week, Congress will vote on this issue, and we encourage Second Life residents to join us in calling on our representatives to preserve net neutrality. 

To that end, we have joined the “Break the Internet” initiative, and if you visit SecondLife.com or login to Second Life today, you’ll notice a pop-up tool (snapshot below) that makes it easy to send a message in support of net neutrality. Of course, if you’d prefer not to use this, you can simply close the pop-up and login as usual, but we hope you’ll consider adding your voice to this important issue.

"Break the Internet" is a page that offers a number of ways to protest the move to remove Net Neutrality, from calling local representatives and senators, to spreading awareness, such as the following video.

GoSpeed Racer, Trader Whiplash, Speak on Rising Cost of Internet Radio

Music by radio has been with us for many years. When computers and Internet came to be, it was possible to play music over streams over the web. When Second Life came to be, each sim had the ability to have a certain station as background music. But are some of these stations in danger of being silenced? At the beginning of the year, new regulations concerning the operating costs of licensed stations inside the United States went into effect. The result is for smaller radio stations there, including many licensed streams in Second Life, running them has become much more expensive.

Read the article in Extra.

Eye on the Blog: "Skill Gaming in Second Life"

In Second Life's earlier days, games of chance were completely legal. One could go around and find games of blackjack, poker, roulette, slot machines, and more in which you could put down and risk as many Lindens as you wanted. Then several years ago it was banned by Linden Lab, citing laws against Internet gambling. As time went on, games which required Lindens to play and offering a chance at a prize began to slowly return, such as "Zyngo." The makers explained these games did not depend completely on chance, but required some choices and skill by the players.

On Wednesday July 9, Linden Lab announced on their blog that they were updating their official policies.

Gambling is strictly prohibited in Second Life and operating, or participating in, a game of chance that provides a Linden Dollar payout is a violation of ourTerms of Service. However, games of skill are legally permitted in many jurisdictions, and we’ve seen that many Second Life users are interested in playing such games for Linden Dollars. Therefore we are updating our gaming policy in Second Life.

There was then a link that took readers to a page on the Second Life wiki which had the details. Among them:

"Skill Games" will only be allowed in specially designated areas. Those whom wish their virtual land to be able to house the games will need to apply to Linden Lab, and pay extra fees, which the Lab says are to offset "additional administrative and compliance-related costs."

Only those approved by Linden Lab to operate "skill games" will be allowed to operate them.

Makers of "skill games" can only sell or otherwise distribute those approved by Linden Lab, and will need to pay "a one-time nonrefundable application fee as well as a quarterly license fee."

Only those living in states where gambling is legal and are old enough are allowed to play the games. Those whom are not either one who try will be considered by the Lab as breaking their terms of service.

The rules are stated as going in effect on August 1, 2014.

Games such as Japanese pachinko machines, which offer not Lindens but tokens which can be exchanged for prizes, card games that offer no Linden prizes but are simply for play, and the "sploders" that are a frequent sight in Second Life clubs are presumably outside these restrictions.

For the blog post in full: http://community.secondlife.com/t5/Featured-News/Coming-Soon-Skill-Gaming-in-Second-Life/ba-p/2771080

Linden Lab's Skill Gaming Frequently Asked Questions page: http://wiki.secondlife.com/wiki/Linden_Lab_Official:Second_Life_Skill_Gaming_FAQ

Skill Gaming Thread in the official forums: http://community.secondlife.com/t5/General-Discussion-Forum/Skill-Gaming-Policy-Thread/td-p/2771090

SL Universe Skill Gaming thread: http://www.sluniverse.com/php/vb/general-sl-discussion/97651-incoming-pages-pages-rules-skill.html

Jacek Shuftan of Podex on the US Treasury's New Guidelines for Virtual Currency

By Bixyl Shuftan

On Friday April 5th, Second Life Newser wrote about the US Department of the Treasury's new guidelines on virtual currency. This move has consequences for Linden Lab as they'll have to spend time, and probably money on extra lawyers, on required paperwork for them. And it's likely this is just the beginning.

Over the weekend, I met up with Jacek Shuftan, the head of the Podex Exchange. He had spoken briefly about the matter at the time the article then was being written, "every coin has two sides, if (Linden dollars) were virtual currency, it would be more trustworthy, and (Second Life) will have more investors." I felt as a Linden reseller, he would have more to say on the matter.

I asked him, "Was there anything else you wanted to say about the US Treasury and Linden Lab?"

"I am still thinking how close it is, and if it (will) happen," Jacek answered, "For now, it is not an obligatory law. For now, it's guidelines. But it does appear there will soon be some regulations. I think that bitcoin is the main point of this, and Lindens is only side effect. But anyway, it can be a pain for us all."

"Anyway, it's too late to stop (the) economical revolution started with virtual currencies. If they ban LS, people will sell objects in SL for, bitcoins, Avination CS, or whatever else. It's only a few lines of coding. Even the real world is full of such 'currencies.' If you go to car wash and get a special metal coin to put into machine, what is it if not currency? You can sell it to other car drivers, exchange it for a glass of beer, or keep it and sell for a higher price when the price of a car wash will go up. Or you can just return it to car wash owner and get cash back. Isn't it currency like Lindens, guaranteed by the car wash owner."

"But nobody cares. and governments look at virtual coins because they are new, and the turnover is higher than a car wash (grin).

I asked, "So even if the Lab calls it's Linden dollars a 'transferable license' and not virtural currency?"

"Its not important what name Linden dollars are called," Jacek answered, "if real-life authorities say it's currency."

"I am afraid it's inevitable, governments can not let citizens have something independent of them."

"So you think it's more about control," I asked, "and not so much a desire for another source to tax?"

"Both," he answered, "It's not a secret that lots of bitcoins are used for illegal operations, and governments want to control it. But taxation is also something tempting for governments. If we go this way, ie if we tax Lindens, what about (virtual) land? It's also a possession. Should we write in a yearly tax statement - 512 sqm parcel by the sea? Ferrari car, 123 prims, bought on Marketplace?"

"I can bet any money that officials do not know what to do with it. So they are just testing now."

I asked, "So they're just seeing what they can do before people complain?"

"I think (to them), it looks like a pimple." Jacek answered, "New activity, like virtual economy, appears. Nobody cares at first, but its growing and growing. You try to ignore it as long as you can, because nobody likes having a pimple at the end of the nose. But finally, it's so big and painful that you must accept it, and we are close to this moment."

I asked, "So that's how you think government sees it, in your opinion?"

"Yes," Jacek answered, "They tried to ignore it as long as they could. And now, its high time to do something. But nobody knows what. So they gave us this paper … And they can always say it's only guidelines if something goes wrong. We observe the same tendency in Europe, and in the USA. So it's a worldwide problem, I think."

" 'There is no such wickedness, or cruelty, which otherwise would not have committed a mild and liberal government, when it runs out of money.' Alexis de Tocqueville, at least through Google translator."

"We will see what the future brings. But people adapt fast. We are very flexible in Second Life."

The interview then ended, and Jacek went about his way.

Jacek Shuftan’s Podex Exchange, sometimes called the Podex bank, exchanges Lindens for several world currencies. Recently they moved to the Coda sim at (45, 218, 61).

Bixyl Shuftan

New Guidelines on Virtual Currency by US Government Mean Complications For Linden Lab

By Bixyl Shuftan

Last month, the US Treasury Department's Financial Crimes Enforcement Network (FinCEN) issued an "interpretive guidance" (pdf link) or guidelines for the regulation of virtual currencies. Alex Kadochnikov of the "Modern Payment Systems" blog had a few things to say about the matter and what it means for Linden Lab. For the average Second Life resident, these guidelines don't directly affect him/her. But for Linden Lab, "FinCEN now considers Linden Dollar as a convertible centralized virtual currency," and it means regulations and paperwork.

To begin with, Linden Lab's terms of service doesn't refer to Linden dollars as virtual currency but each being a "virtual token" or a "limited license" that could be traded, "Linden dollars are not real currency or any type of financial instrument …" But these words haven't meant much to residents who've treated it as money within Second Life, the only risk being if they ever lost their connection to the Grid. As Kadochnikov wrote, "FinCEN goes by the approach 'If it looks like a duck, and quacks like a duck, it is a duck.' And Linden Dollar sure does 'quack' like one. Linden dollar is a virtual currency because it has value in real currency (a buck will buy you about 270 linden bucks); and people buy good and services with it."

As "an administrator and an exchanger of virtual currency" they were a "Money Service Business" or MSB under US Treasury guidelines. As a result they, "must register with the Treasury Department and make Anti-Money Laundering and periodic reports." This means more expenses for Linden Lab as, "these reports are not little one page chores a trained monkey can do. There is a reason corporate compliance departments are stacked with lawyers and accountants. As you can imagine both of these items cost a lot of money."

Hamlet Au thought that this would mean Linden Lab will have to hire two or three additional lawyers just to deal with this matter, costing them about a half million dollars a year. The only other option it seems would be to abandon the Linden dollar and deal just with real world currencies. While it would save them these bureaucratic headaches, it would be "like turning off a printing press that prints money. And who in their right mind wants to do that?"

Hamlet Au thought there was one additional complication. If the Lab was thinking of selling Second Life, it just became more difficult as any buyer would have to deal with these regulations and expenses. One result of the Treasury Department's new guidelines may be that Linden Lab can pretty much forget about someone buying the virtual world from them.

Second Life Newser did briefly discuss the matter with Jacek Shuftan, the head of it's sponsor Podex Exchange. He expressed suspicion of the US Government's motives, but "every coin has two sides, if (Linden dollars) were virtual currency, it would be more trustworthy, and (Second Life) will have more investors." So perhaps the move has some benefits.

Sources: New World Notes, Modern Payment Systems

Bixyl Shuftan